Tension at the Mobile World Congress: Deutsche Telekom AG Versus Viber*

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You could feel the tension in auditorium 1 in Hall 4, as behind the polite and courteous smiles, the insults were flying: “It’s us who invest but they’re the ones that take all the profits!” exclaimed René Obermann, CEO of Deutsche Telekom AG, Germany’s largest telecommunications operator.

René Obermann has been on the management team of Deutsche Telekom AG since 2006 and has been part of the group since 1998. He will step down as CEO at the end of this year, when his term of office comes to an end. Obermann is a brilliant man, but his stewardship has recently been marked by the failure of plans to sell the T-Mobile USA subsidiary to AT&T, and the announcement of a reduction in the Deutsche Telekom AG dividend by almost one third over the next two years. And the reason for this? To finance investment, of course.

He doesn’t pull his punches when speaking: “current models are not economically viable, innovation cycles are shorter, the need for investment is going through the roof, prices are crashing, the industry is ‘hyper-regulated’ and ‘over-taxed’ by stupid regulations.” So how can we “do more with less”, without affecting the cost to consumers? Especially since customers are becoming more and more demanding and expect prices to be constantly lowered in a fragmented market, without really knowing what they will ultimately end up paying.

René Obermann criticizes what he calls the ‘OTT paradigm’: “you invest, we reap the rewards!” By ‘you’, he is referring to telecommunications operators.

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*I was invited to attend Mobile World Congress by Orange Group to join their Social Media Team. Read more about these 4 days reports from the team at Live Orange Blog.

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